I may as well get this started. AFTER you do a pile of due diligence, You place a value on the land. What is it worth without the homes. Is it 4 seperate building lots or 3 homes on one deed? Well or city, septic or sewer, Are the homes doubles or singles, older or newer, zoning, good tenants or bad, new underground piping or “orangeberg” etc, etc? Then you value the homes as if you were buying them to “Lonnie” without the land. I am assuming this guy wants to make his problem (judgement) go away. If it was such a great deal he would be advertizing it locally ( or may have already done it) and not had any takers. You say you are going to Lonnie the homes to pay off the mortgage? So the homes will sell for $83,000? This may be a great deal (it doesn’t sound bad if the 3 homes are not piled on top of each other)or it may be a stinker. You have to do the homework. Ps depending who the judgement is with you may be able to negotiate a lower payoff. Good luck!
So, i am new to this, but VERY eager to get started. I have all 3 of Lonnie’s books and have read them 2 times each. Outstanding books by the way Lonnie!! Anyway, i used one of the techniques described in the books about listing a wanted add for homes and that you will pay up to 5k for the home.
So, i do this in a local advertisement newspaper about 45 mins north of where i am in NC. And i got a bite. Guy calls me about the add, and states that he has A mobile home for sale. After listening for some time, he makes reference to the fact that he has multiple mobile homes in the area. Intrigued, i asked about them… So he has 4 lots, 3 mobiles renting for 550, 500 and 460 and a lot rent 250 month. His wife and he are getting divorced and he just wants out.
Total owed on this is 60K, plus a 10 K judgment that needs to be paid. We negotiate and he offers up another property he has right next door to the other props and says i can buy that too, payoff 23 K and renting for 500 mth. So here is a break down on the deal and i am really serious about purchasing all.
4 lots (3 homes and lot rent) 60K
1 lot and mobile 23k
I can assume these mortgages for a total of 83K.
Pay off his judgment for 10 K and assume mortgage for 83K.
$2260 income, mortgage payment $640.
So i can be into this deal for 10 K with T&I, Prop Management fees and 200 a month for incidentals, I still clear 1K a month.
Question, does property value come into it?? Cash flow good, prop value only buying @ 80% of value, not 70% as they recommended.
Plan, Lonnie deal the homes to pay off mortgage, then just collect lot rent…Not as much as rental, but headache wise, probably worth it.